BLUE COLLAR PAY

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BLUE COLLAR PAY

• MARK ALLEN
• FEDERAL WAGE SYSTEM TEAM LEADER
• OFFICE OF PERSONNEL MANAGEMENT
• GARY MEADOWS
• CHIEF, WAGE AND SALARY DIVISION
• DEPARTMENT OF DEFENSE

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FEDERAL WAGE SYSTEM
Covers blue collar Federal positions in which
trade, craft, and laboring experience and
knowledge are paramount.
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FEDERAL WAGE SYSTEM COVERAGE

• 206,000 appropriated fund employees
• Around 30 payplans, plus numerous special
  schedules
• Every State and 20 foreign countries
• 46 Departments and Agencies
• Majority Defense related
• 45,800 nonappropriated fund employees
• Militarys Morale, Welfare, and Recreation
  facilities
• Exchanges
• VA Canteen Service

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BASIC POLICY 5 U.S.C. 5341
Rates of pay of prevailing rate employees shall
be fixed and adjusted from time to time as nearly
as is consistent with the public interest in
accordance with prevailing rates and be based on
the principles that
(1) There will be equal pay for substantially
equal work for all prevailing rate employees who
are working under similar conditions of
employment in all agencies within the same local
wage area (2) There will be relative
differences in pay within a local wage area when
there are substantial or recognizable differences
in duties, responsibilities, and
qualifications requirements among positions (3)
The level of rates of pay will be maintained in
line with prevailing levels for comparable work
within a local wage area and (4) The level of
rates of pay will be maintained so as to attract
and retain qualified prevailing rate employees.
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PREVAILING RATE HISTORY

• 1862 1965
• Separate Agency Pay Systems
• Prevailing rate principle originated in
  shipyards during Civil War.
• Laws allowed blue-collar pay setting by the
  head of each agency.
• No central coordination or control of
  Governmentwide policies.
• Multiple local wage surveys.
• Different pay rates for different agencies in
  the same city.
• Overlapping wage area boundaries.
• Interagency pay administration difficulties.
• Interagency competition for workers.
• Credibility problems.

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PREVAILING RATE HISTORY

• 1965 1972
• Coordinated Federal Wage System
• Established by Presidential directive.
• Civil Service Commission worked with agencies
  and unions.
• Labor-management National Wage Policy Committee
  established.
• Coordinate and replace separate agency pay
  systems.
• Common policies retained.
• Unusual policies accommodated when possible.
• Main employing agency in an area does all wage
  surveys.
• One wage schedule for all agencies in an area.

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PREVAILING RATE HISTORY

• 1972 Present
• Federal Wage System
• Labor wanted gains under CFWS codified.
• Public Law 92-392, the Prevailing Rate Systems
  Act of 1972.
• Similar to policies under CFWS.
• Guaranteed labor involvement at all pay-setting
  levels.
• Established Federal Prevailing Rate Advisory
  Committee.
• Set uniform nationwide night shift
  differentials as basic pay.
• Added steps 4 and 5 to regular wage schedules.

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GENERAL INFORMATION
OPM coordinates and oversees Governmentwide
policies with the advice of the Federal
Prevailing Rate Advisory Committee (FPRAC). DOD
is the lead agency for conducting surveys and
issuing wage schedules.


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WAGE SURVEY PROCESS
OPM DEFINES wage areas survey
jobs survey industries lead agencies
FEDERAL PREVAILING RATE ADVISORY COMMITTEE
advises OPM
LEAD AGENCY plans surveys
analyzes data names local host constructs
activity survey approves committee
chairperson schedules
AGENCY WAGE COMMITTEE advises lead agency
HOST ACTIVITIES support surveys
LOCAL WAGE SURVEY COMMITTEES hold hearings
arrange for data collectors run surveys
review wage data
NOTE All Committees are Labor-Management
Committees
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FEDERAL PREVAILING RATEADVISORY COMMITTEE

• Established under 5 U.S.C. 5347 to advise OPM on
  the administration of the Federal Wage System
  including
• definitions of local wage areas
• policies on pay administration and
• coverage of local wage surveys, including the
  occupations, establishment sizes, and industries
  to be surveyed, and how wage surveys are
  conducted.

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FEDERAL PREVAILING RATEADVISORY COMMITTEE

• Current members
• 5 management members
• Department of Defense
• Two Military Departments (rotated among Air
  Force, Army, and Navy)
• Department of Veterans Affairs
• OPM

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FEDERAL PREVAILING RATEADVISORY COMMITTEE

• Current members
• 5 labor members appointed by OPM Director
  from among labor organizations representing the
  largest proportion of FWS employees
• Metal Trades Department/AFL-CIO
• Two seats for American Federation of Government
  Employees
• National Association of Government Employees
• Association of Civilian Technicians (Ind.)

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Each Consists of
OPM DEFINES WAGE AREAS

• 1. SURVEY AREA
• A geographic area consisting of one or more
  counties with major concentrations of Federal
  employment and private industrial establishments.

• 2. AREA OF APPLICATION
• A geographic area consisting of one or more
  counties, including and surrounding a survey
  area, where a wage schedule applies.

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OPM DEFINES WAGE AREA CRITERIA
(i) Distance, transportation facilities, and
geographic features (ii) Commuting patterns
and (iii) Similarities in overall population,
employment, and the kinds and sizes of private
industrial establishments. Generally, the
criteria are considered in the order listed.
The regulatory criteria are based on
labor-management agreements developed at FPRAC.
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WAGE AREA ADEQUACY REQUIREMENTS

• 100 or more FWS employees of an agency to
  establish a separate wage area.
• No established minimum FWS employment to trigger
  wage area abolishment.
• Lead agency must have capability to conduct local
  wage surveys in the area.

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WAGE AREA REVIEW PROCESS

• OPM defines wage area boundaries after receiving
  the advice of FPRAC.
• OPM initiates review at FPRAC every 10 years
  following receipt of decennial census data.
• Outside of the 10-year review process, any labor
  or management FPRAC member can introduce a
  subject for discussion.
• OPM has accepted and implemented every FPRAC
  recommendation on wage area boundaries.
• No legislative action has redefined a wage area
  boundary.

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JOB GRADING SYSTEM

• 5 U.S.C. 5346 provides OPM authority to
• Establish the basic occupational alignment and
  grade structure.
• Establish and define occupations.
• Establish job titles.
• Publish job grading standards.
• Assure consistency.

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JOB GRADING SYSTEM

• OPM must consult with agencies and employee
  organizations.
• FPRAC makes recommendations to OPM on the 39 key
  ranking jobs.
• OPM publishes key ranking jobs in appendix I of
  OPM Operating Manual Federal Wage System.
• Key ranking jobs serve as basis for job grading
  structure (for internal alignment) and survey job
  descriptions (for external alignment).

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REGULAR SCHEDULE STRUCTURE

• WAGE LEADER (WL)
• NONSUPERVISORY
• WORK LEADER
• 15 grades
• 5 steps within each grade
• 4 percent between each step
• 10 percent differential
• above corresponding WG rate

• WAGE GRADE (WG)
• NONSUPERVISORY
• 15 grades
• 5 steps within each grade
• 4 percent between each step
• Step 2 rates comparable with prevailing private
  sector rates

• WAGE SUPERVISOR (WS)
• SUPERVISORY
• 18 grades (positions are not classified at
  WS-19)
• WS-19, step 2, rate equal to GS-14, step 3, rate
• 5 steps within each grade
• 4 percent between each step
• 30 percent differential above corresponding WG
  rate is typical

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Gary MeadowsChiefWage and Salary Division

• Department of Defense
• Civilian Personnel
• Management Service
• (CPMS)

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References

• Public Law 92-392
• Title 5, Code of Federal Regulations, Part 532
• OPM Operating Manual, Federal Wage System
• OPM Operating Manual, Federal Wage
  System-Nonappropriated Fund
• Public Law 107-67, Pay Limitation of 4.8 for
  Fiscal Year 2002

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Wage and Salary Division Mission

• Execute DoD Pay Setting Authority
• Prevailing Rate (Blue Collar) Locality Surveys
• Special Industry Surveys

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Organizational Chart
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Federal Wage System (FWS)
Office of Personnel Management (OPM)
Federal Prevailing Rate Advisory
Committee (FPRAC)
Lead Agency (DoD) CPMS, Wage and Salary Division
and DoD Wage Committee
Local Wage Survey Organization
Data Collection Teams
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Prevailing Rate Surveys

• Appropriated Fund - Trade, craft, and laboring
  occupations
• Nonappropriated Fund
• Trade, craft, and laboring occupations
• Administrative Services
• Patron Services
• Paybanding

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Special Schedule Surveys

• Appropriated Fund
• Maritime Industry
• Printing and Lithographic
• Power
• Overseas Educators
• Occupational Special Rates
• Nonappropriated Fund - Occupational Special Rates

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Subchapter S11 - Special Wage Schedules
FWS Appropriated Fund

• Production Facilitating Positions (WD and WN)
• Printing and Lithographic Positions
• U.S. Citizen Wage Employees in Foreign Areas
• Federal Wage Employees in U.S. Insular Areas
• Aircraft, Electronic, Optical Instrument
  Overhaul Repair Positions in Puerto Rico
• Corps of Engineers, U.S. Army Navigation Lock
  Dam Employees
• U.S. Department of Navy Positions in Bridgeport,
  CA

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Appendix V - Agency Special Wage Schedules
Rates Documented Under the FWS Set-Aside
Schedules
FWS Appropriated Fund

• Alaska Area Differentials (4, 8, and 12)
• U.S. Army Corps of Engineers, Employees on
  Floating Plants (other than Hopper Dredges)
• U.S. Army Corps of Engineers, Hopper Dredge Rate
  Schedules (Atlantic Gulf Coasts and West Coast)
• Electronic Equipment Maker, Installer Repairer,
  and Radio Maintenance Employees, Washington, DC
• Television System Employees, Washington, DC

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Special Pay Systems Branch

• Special Industry Schedules
• Occupational Special Rates
• Title 38 Special Salary Rates for Civilian Health
  Care Professionals (GS)
• Title 5 Special Salary Rates (GS)
• Monitor Provide Technical Assistance for
  Compensation of Foreign National Employees

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Scope of Operations

• Pay Plan Number of Employees Number of
  Schedules
• Foreign National Oversight 73,000
  48
• Title 5 38 GS Special Rates/Oversight
  52,000 312
• NAF Federal Wage System
  45,800
  375
• NAF NF (Pay Band) 43,000
  125
• NAF Administrative Support Patron Services
  2,300
  250
• Overseas Educators 9,400
  25
• Overseas FWS (APF and NAF)
  6,600
  10
• Maritime 3,500
  8
• Lock Dam 1,800
  69
• Miscellaneous
  
  500
  20
• Federal Wage System (APF)
  206,000
  980
• Corps of Engineers Power Plant
  1,000 8
• Floating Plant
  700
  93
• Defense Language Institute
  600
  1
• Printing and Lithographic
  235
  5
• USUHS
  200
  4
• Hopper Dredge 200
  4

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Survey Specifications(Full Scale Survey)

• Wage Area Definition
• Industries Surveyed
• Establishments Surveyed
• Minimum Establishment Size
• Survey Jobs

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Industries Surveyed

• Appropriated Fund
  Nonappropriated Fund
• Manufacturing l Wholesale
• Transportation l Retail
• Communications l Services Recreation
• Public Utilities
• Wholesale
• Industries may be added to the above when they
  account for significant private employment within
  the wage area.

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Establishments Surveyed

• Universe Survey - Includes all firms in survey
  area which meet minimum size and industry type
  requirements
• Probability Sample Survey - Includes a
  representative sample of firms which meet
  minimum size and industry type requirements
• Establishment Survey Listing

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Minimum Size

• Appropriated Fund 50 or more employees OPM may
  authorize lower minimum size.
• Nonappropriated Fund 20 or more employees 8 or
  more employees for Automatic Merchandising
  Machine Operators, Gasoline Service Stations,
  Bowling Centers, and Membership Sports and
  Recreation Clubs.

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Survey Jobs

• Appropriated Funds
• 21 required jobs representing grades 1-13
• 33 optional jobs representing grades 4-11
• 3 added jobs for hospitals representing grades 1,
  2, and 8
• Additional jobs only with prior approval from OPM

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Survey Jobs

• Nonappropriated Fund
• 21 required jobs representing grades 1-10
• 11 optional jobs representing grades 1-10
• Additional jobs only with prior approval from OPM

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Wage Change Survey

• Update findings of full scale survey
• Same employers, occupations, weights, and wage
  line as full scale survey
• Usually by telephone but may be by mail or
  personal visits

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Monroney Amendment

• Provision named for former Oklahoma Senator Mike
  Monroney
• Section 5343(d) of title 5, United States Code
• Established in 1969 and provides for possible use
  of wage data from outside a local area as a basis
  for establishing wages in areas with specialized
  industries

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Monroney Amendment

• DoD employees exempted from coverage in 1985
• Restored for DoD employees on December 28, 2001
  (effective with 2002 wage survey results)
• FY 2002 NDAA, PL 107-107, Section 1113,
  reinstated provisions of the Monroney Amendment
  for DoD FWS employees

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Monroney Amendment

• Specialized Industries consist of Federal
  organizations involved in industrial production
  or repair activities (10 categories)
• l Aircraft l Guided Missiles
• l Ammunition l Heavy Duty Equipment
• l Artillery Combat Vehicles l Shipbuilding
• l Communications Equipment l Sighting Fire
  Control
• l Electronics l Small Arms

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Monroney Application

• How to qualify for a dominant industry
• Dominant Industry - At least 25 of total FWS
  employment or 1,000 or more employees in a wage
  area having more than 4,000 wage employees
• Not all wage areas have a specialized industry
  thirty-seven areas (out of 132) qualify

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Monroney Adequacy (Industry)

• Survey Area is one of the 25 largest Standard
  Metropolitan Statistical Areas or
• Total number of employees in specialized private
  industry establishments located in the survey
  area is at least equal to total number of FWS
  employees working in the specialized industry

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Monroney Adequacy (Jobs)

• Jobs found at companies involved in specialized
  industry each must provide unweighted samples

• l 1 in WG-01 through WG-04 regular job/20
  samples
• l 1 in WG-05 through WG-08 regular job/20
  samples
• l 1 in WG-09 or above regular job/20 samples
• l 1 in WG-09 or above special job/20 samples
• l 3 in WG-01 or above regular or special job/10
  samples

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Monroney Adequacy (Jobs)

• l If inadequate industry or jobs found in
• the local area, then look for a
• reference area having the industry and
• jobs
• Contiguous areas
• Surrounding areas
• Nearest adequate area

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WITHIN-GRADE INCREASES

• 5 U.S.C. 5343(d) provides 5 steps for each
  regular nonsupervisory wage schedule.
• 96, 100, 104, 108, 112 percent requirement.
• Step 1 to Step 2 requires 26 weeks service.
• Step 2 to Step 3 requires 78 weeks service.
• Step 3 to Step 4 requires 104 weeks service.
• Step 4 to Step 5 requires 104 weeks service.
• Work performance must be satisfactory or better
  for automatic advancement.
• Average FWS employee at step 4.

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DIFFERENTIALS

• Night shift differentials under 5 U.S.C. 5343(f)
  
• 7.5 percent between 3 p.m. and midnight (second
  shift).
• 10 percent between 11 p.m. and 8 a.m.(third
  shift).
• Entitlement based on majority of regularly
  scheduled non-overtime work (5 of 8).
• Once triggered, payable for all hours in a day.
• Uniform application, not based on local
  prevailing practices.
• Basic pay.

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DIFFERENTIALS

• Environmental differential payments (EDP) under 5
  U.S.C. 5343(c)(4)
• For duty involving unusually severe working
  conditions or unusually severe hazards.
• Categories under Appendix A to Subpart E of 5 CFR
  part 532.
• Highest category set at 100 percent of local
  WG-10, step 2, rate.
• Most either 4 percent or 8 percent.
• Basic pay.

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PAY CAP LEGISLATION

• 30 years of prevailing rates under the FWS.
• Only 6 years without a cap on adjustments.
• Adjustments capped at average GS increase
  sinceFY 1979.
• Pay gap less than 3 percent when measured at step
  2.
• Formula links cap with average GS increase
• Across-the-board increase in General Schedule,
  plus
• Difference between locality pay in current year
  and previous year.
• Delays wage schedule issuance in first quarter of
  fiscal year.
• 4.8 percent cap in FY 2002.

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PAY FLEXIBILITIES

• Special Qualifications Appointments
• Allow an agency to hire unusually well qualified
  candidates at any of the five steps of the
  appropriate grade level instead of the first
  step.
• Agency approval required.
• Increased Minimum Hiring Rate Authority
• Allows the lead agency to establish a step higher
  than the first step as the minimum step at which
  a new employee will be hired.
• Lead agency approval required.

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PAY FLEXIBILITIES

• Special Rate Authority
• Allows an agency to request OPM approval to
  establish rates above the regular wage schedule
  for an occupation or group of occupations.
• Lead agency review and OPM approval required.
• Special Schedule Authority
• Allows an agency to request OPM approval to
  establish a higher schedule of rates in a manner
  generally broader in scope than under the special
  rate authority.
• OPM approval required.
• FPRAC reviews.
• Regulated vs. set-aside special schedules.

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PAY FLEXIBILITIES

• Unrestricted Rate Authority
• Allows OPM to waive annual statutory caps on FWS
  pay adjustments.
• Cap provision must contain waiver authority.
• Lead agency review and OPM approval required.
• 3Rs
• Agencies may use Recruitment Bonuses, Relocation
  Bonuses, and Retention Allowances to attract and
  retain employees.
• Agency approval required.

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CONGRESS

• Report to Congress on the Cost of Administering
  the Federal Wage System.
• Report to Congress on Pay for Bureau of Prisons
  Federal Wage System Employees.
• Report to Congress on the Salinas-Monterey,
  California, Wage Area.
• Treasury and General Government Appropriations
  Act would contain pay cap.